The machines are on the march: how to invest in artificial intelligence

In 1930 J. M. Keynes predicted that we would be “technologically unemployed” by 2030. The rise of the robots has been slower than he expected, but it is still a trend investors can profit from, says Chris Carter.

The new robot waiter serving tea and coffee at a cafe in Daejeon, South Korea, last month was unfazed by its customers’ face masks. Covid-19 could have no effect on its whirring gears and circuits. “Here is your Rooibos almond tea latte, please enjoy,” it said, smiling, to the masked customer who reached up to take it. The hot beverage had been made moments before by the waiter’s colleague, a robotic-arm “barista”. Customers send their orders to the robotic-arm via a touch-screen and the drinks are brought to the table by the robot waiter. 

The system is called Storant and was developed by Korean “smart factory solution provider” Vision Semicon. “Robots are fun and it was easy, because you don’t have to pick up your order,” Lee Chae-mi, a customer in the cafe, told Reuters. Then, as an after-thought, the 23-year-old student, said: “But I’m also a bit worried about the job market as many of my friends are doing part-time jobs at cafes and these robots would replace humans”. Our attitudes to robots are broadly summed up in those two sentences.

Robots are fun. They seem to embody the future. And we enjoy watching something artificial appear to ape humans going about their work. Nevertheless, if robots are doing “human jobs”, then what are we going to do? After all, these artificial workers are far more appealing to employers than their human counterparts. 

They don’t complain. They don’t ask for more money or call in sick because they are hungover. They don’t ask for longer breaks and they don’t go on strike. They don’t get tired. And while they might break down, they never get ill and infect others. Nor do they go on holiday, take time off to raise little robots, or resign to go and work for the competition. And as technology advances, robots will perform a wider range of tasks. They will perform them faster, potentially for less money and with greater precision. Our days spent toiling away from nine to five are numbered. 

“Technological unemployment” rattled J. M. Keynes

John Maynard Keynes certainly thought so – which also goes to show, however, that “automation anxiety” is nothing new. In 1930, he wrote in his Essays in Persuasion, “We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come – namely, technological unemployment”. In fact, even in Keynes’s time, “technological unemployment” wasn’t exactly new; witness the Luddites of the 19th century smashing up textile machinery.

But Keynes was the first economist to, as he put it, “take wings into the future”. He tried to see what technological unemployment spelled for future generations. What he saw was leisure time and lots of it. “The strenuous purposeful money-makers may carry all of us along with them into the lap of economic abundance,” Keynes wrote. “But it will be those peoples who can keep alive, and cultivate into a fuller perfection, the art of life itself and do not sell themselves for the means of life, who will be able to enjoy the abundance when it comes.” And when was this abundance to come? In ten years from now: Keynes was writing about how he thought life would be in 2030. So, is it almost time to kick off your shoes and embrace “the art of life itself”? 

Full automation may never arrive

Not quite yet. A complete takeover by machines seems unlikely. Some people will no doubt continue to “sell themselves for the means of life” a century from now. “Even at the [21st] century’s end, tasks are likely to remain that are either hard to automate, unprofitable to automate, or possible and profitable to automate but which we will still prefer people to do,” says economist Daniel Susskind in A World Without Work, published in January.

What we are facing in this century is not no work, but less work. And the work that endures will change. As Susskind sees it, there are two forces at play. There is the “harmful, substituting force” that will see people lose their jobs to machines. And there is the “helpful, complementing force” that helps people to do their jobs better and be more efficient, such as the artificial intelligence (AI) programs that help doctors to diagnose cancers. Up until now, the complementing force has been most prevalent. 

New jobs will emerge... but will there be enough?

But as technology advances, the second, substituting force will come to dominate. Take taxi drivers. For now, satnav road-navigation systems help taxi drivers find their destination faster as they take fewer wrong turns and avoid traffic jams. The effect is that they can fit more fares into their day. But in the years to come, cars might start driving themselves, doing away with taxi drivers altogether. From having been “complemented”, taxi drivers will then have been “substituted”.

For years, we have been told not to worry. Yes, some jobs will be sacrificed to the march of the machines. However, new jobs will be created as old ones are snuffed out, just as blacksmiths making horseshoes were replaced last century by people making car tyres. And it wasn’t just the tyres that needed making. You now had people designing the cars, building and repairing the engines, too, not to mention the emergence of an entire oil industry. 

But there is something else going on here. Notice that the horse also had a job. It was pulling the carriages, ploughs and carts, much as it had done for millennia. Then it was replaced within a few decades by the combustion engine and there was nothing left for the horse to do. The horse had been rendered “economically useless”. This, as Yuval Noah Harari warns in his book Homo Deus, is the future that may await many people. We will have to find new work.

But what if we can’t? Owing to greater efficiencies from better technology, the “productivity effect”, we won’t need all those people making cars and everything else. Robots will make them, much as they do already. Last year, an estimated 422,000 industrial robots were sold around the world, according to the non-profit organisation the International Federation of Robotics (IFR). In just two years’ time, according to the IFR, that number will have risen to 584,000. So, on the face of it, factory workers will need to retrain. 

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